If it wasn’t completely clear before, it ought to be clear now. Data is King. And whoever controls the data rules the land. Ostensibly, consumers own their own financial data. But that data typically lives on the financial institutions’ infrastructure where it is stored, managed and protected.
Furthermore, financial institutions have invested massive amounts in the infrastructure necessary to manage the vast amount of data; servers, networks, security, staffing, etc. The banks are then compensated for this investment through the services they provide.
But what if clients no longer need the same level of services from banks? What if clients prefer to use independent software providers such as Mint, Expensify and/or Tallie because they like how they present the data or the functionality? This increasing trend is leaving banks with the same fixed cost for their infrastructure, but greater competition and potentially reduced income...
So does it come as a surprise when the banks have challenges with third party software providers’ access to this same data as shown by these recent articles?- Big Banks Lock Horns with Personal Finance Web Portals and Bank of America Cuts off Finance Sites from its Data
The banks state that there are two reasons they are doing this:
1. Insufficient security measures on the part of the third party software providers
2.Overly burdensome use of the banks’ servers and infrastructure due to the data demands of the third party software providers
It’s hard to argue against either since the first is in the best interests of their clients and the second represents a steadily increasing tax on the banks’ resources. But in reality there is a third reason the banks are limiting access to data:
3. Loss of services’ revenue and increased competition
4. Consumers are embracing self-management of their financial resources in ever-greater numbers. In today’s world where Facebook, Twitter and SnapChat provide instant updates on friends, sports teams and celebrities, individuals demand real time access to their financial data in the form that they prefer. Individuals value transparency; having their data available in user- friendly tools that can be accessed anywhere is powerful. The problem for the banks is that they aren’t able to provide these same types of tools with the same currency or quality due to lack of resources and unwieldy compliance departments. But, by cutting off access to the data, are the banks cutting off their nose to spite their face?
This brings us to EEI. No one is better at understanding and managing data in a secure manner than this 20 year stalwart of financial data management.
EEI recently introduced the Trusted Network Platform™ for financial institutions and wealth managers. The Trusted Network Platform™ is an “assets held away” aggregation solution that intelligently empowers financial Institutions with clean, consistent and trusted data enriched with client specific business rules and processes.
The value of The Trusted Network Platform™ is that it safely manages and delivers the data to whatever third party software the client desires. The design of this tool enables it to address the three challenges that have led the banks to stop access to their data. The bank is ensured of its secure management and they can charge a fee for delivery (instead of allowing the screen scraping companies to make off with all the royalties). Alternatively, the banks could design and populate their own personal finance management tool. Ultimately a financial world empowered by EEI’s Trusted Network Platform™ is one in which both the client and the bank are much better off than the untenable status quo.
Enterprise Engineering, Inc.
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